ZEELAND — Despite numerous challenges in its operating environment, Zeeland-based automotive supplier Gentex Corp. managed to record its second highest sales quarter in company history.
The supplier of digital vision, connected car, dimmable glass and fire protection technologies reported net sales of $483.7 million for the first quarter of 2021 that ended on March 31. This stood as a 7-percent increase year-over-year, while only the fourth quarter of 2020 yielded higher sales.
The company reported net profit of $113.5 million — a 27 percent increase from the same quarter last year — and gross margins of 37.9 percent.
Gentex also delivered earnings of $0.46 per diluted share, which was a 28 percent jump from last year.
The rising sales figures come as a shortage in microchips and other materials have significantly slowed down vehicle production. Gentex reported that North American light vehicle production for the first quarter was 12 percent below original forecasts.
Gentex said that the slowdown in production contributed to around $45 million in lost revenue for the quarter.
The company was also able to grow margins against the backdrop of a market that is witnessing rising prices for both raw materials and freight.
“The chaos created this quarter by component shortages, freight issues, as well as customer plant shutdowns and order changes made scheduling very difficult, but the team at Gentex was able to not only keep up with our customers’ orders but also improve gross margins by 340 basis points versus the first quarter of last year,” Gentex President and CEO Steve Downing said in a statement.
“While the gross margin in the first quarter of 2021 was below our annual guidance range, the majority of that shortfall was driven by the $45 million in lost sales in the quarter. We expect to see further improvement in gross margins based on the higher sales levels that are forecasted for the remainder of the year.”
Gentex also repurchased 2.8 million shares of its common stock at an average price of $35.46 per share and has a remaining 6.7 million shares available for repurchase pursuant to its share repurchase plan.